Game Changing Cash Forecast Visibility

CEVA Logistics partners with CashAnalytics to quickly gain company-wide cash forecast visibility; brings order to its expansive network of bank accounts

When there is no central visibility over balances or activity, forecasting becomes a serious challenge. It’s why CEVA Logistics, partnering with CashAnalytics, set about transforming its cash visibility. It’s a feat worthy of the 2021 Corporate Recognition Technology Award for Best Cash Visibility Solution.

Corporate Recognition Awards

Best Cash Visibility Solution

CEVA Logistics

Until late 2020, the treasury team at CEVA Logistics was in a continuously reactive position, distracted, for the most part, by low-value activities. The principal reason for this state of affairs was that it had more than 1,100 worldwide bank accounts – held both at a corporate and business unit level – and no central visibility over its balances nor any activity on bank accounts held outside its corporate cash pools. It meant that cash was not under full control, with accurate and timely forecasting a serious challenge. But change was coming – and fast.

Throughout 2021, the treasury team, led by Group Treasurer Davina Bradley, implemented a wide-reaching cash flow management and cash flow visibility transformation project. It has since reaped numerous high-value benefits for the $7.4bn global logistics company, not least in terms of its forecasting capabilities. At the heart of the project was an implementation of the CashAnalytics cash reporting and forecasting platform.

Visibility first

During the six-month project, CEVA Logistics was able to implement a new 13-week multicurrency rolling forecast model, covering more than 40 entities, using the CashAnalytics platform. This supported treasury with fully automated data capture and reporting, detailed variance analysis on a per entity basis, and visibility and tighter control over group FX exposures.

Alongside this project, the firm’s multiple banking partners and 1,100-plus worldwide bank accounts underwent an intense review by the CashAnalytics team. This led to treasury having almost immediate weekly visibility over company cash. At the same time, it executed a longer-term project to connect all key banking partners via SWIFT, designed to ensure real-time reporting of all CEVA’s bank statements.

As the projects progressed, CashAnalytics was rolled out to 40-plus key entities worldwide. This delivered daily detailed visibility at both a consolidated and bank account level, presented through a suite of reports and dashboards.

CEVA’s treasury team was now in a position to begin rationalising the number of bank accounts and banking partners. This saw an initial 40% (500) of its bank accounts closed, and the cessation of around 46% of its banking partnerships. Further reductions will follow in 2022.

With bank and forecast visibility providing a clear picture of cash across the company, the focus shifted to unlocking idle cash and centralising it in corporate treasury. Releasing about $100m, the cash was used to fund working capital across the company. In addition, with CashAnalytics having enabled CEVA to expose its per currency cash balances and flows across its entire business, a global review drove the implementation of new FX policies and controls, resulting in a significant reduction of CEVA’s FX losses.

Transformational

Wrapped around the core forecasting visibility, cash centralisation and risk management benefits of the project were some significant operational improvements. These included the centralisation of all bank mandates, ongoing centralisation of payments, the implementation of a new credit management policy, and the implementation of a new bank management policy.

Overall, the project has encouraged a forecasting revolution within CEVA. It has seen the business move from organisation-wide cash uncertainty, to 100% visibility over actual and medium-term (13-week) forecast data. With more than $100m of unused cash now working hard, it has also unearthed significant interest savings. Treasury has also been able to reallocate the hours and days saved every week on mundane manual tasks to higher-value activities.

Improving its cash flow visibility across the business has enabled treasury to steer the company toward a sustainable path through more effective daily cash management. It has also seen the treasury team begin to play a more strategic role in the management of all financial aspects of the business.

In a relatively short period, a strong platform has been created that, by putting cash at the centre of all CEVA Logistics’ decisions, enables its sustainable growth. It’s a testament to the extensive impact that a treasury armed with the right tools can have on a business, placing it at the strategic heart of all cash and capital planning.

For Conor Deegan, Co-Founder and CEO, CashAnalytics, the win with CEVA exemplifies true partnership. “We are delighted for CashAnalytics to be recognised by TMI as part of the Best Cash Visibility Solution 2021,” he says. “Our clients are at the centre of what we do, and to work alongside the Treasury team at CEVA Logistics has been very rewarding.”

He continues: “Cash visibility transformation is really about elevating the entire financial process so that it’s connecting with key strategic priorities for the business, and this is exactly what CEVA logistics set out to do and achieved. I was particularly impressed with the pace that Davina and her team took to implement their transformation and the tangible results that followed. I’d like to congratulate the CEVA team on this win and thank TMI for recognising their innovation in treasury.”

The final word must of course go to Davina Bradley, Group Treasury and Financing Leader, CEVA Logistics. “A big thank you to the CEVA Treasury and Finance teams worldwide for their invaluable contribution, and to CashAnalytics for their excellent solution and advice all along the way,” she says. “And of course, many thanks to TMI for recognising our team work and tenacity, and congratulations to our peers in treasury who have also won a prize. We look forward to being back next year.”